Here’s What Traders Expect after Bitcoin Price Hit $13,217

On October 21, the price of Bitcoin broke the $13,000 point to hit $13,217 after traders cleared key resistance levels at $11,900, $12,000 and $12,500 in the past 48 hours. While there are several technical reasons behind this sudden rally, three key factors are driving it.

These are a favorable technical structure, PayPal allowing the purchase of cryptocurrencies and the increasing dominance rate of Bitcoin.

PayPal announcement adds to Bitcoin momentum

PayPal officially announced that it would allow its users to buy and sell cryptocurrencies, including Bitcoin.

Throughout the past year, speculation about the possible integration of the cryptocurrency to PayPal continuously escalated after various news reports claimed that the company was working to make it possible.

In an official statement, Dan Schulman, president and CEO of PayPal, confirmed the integration of the cryptocurrency. He wrote that PayPal looks forward to working with central banks and regulators around the world. Moreover, the company offers its support for shaping the role that digital currencies will play in the future of world commerce and finance.

Following PayPal’s announcement, the price of Bitcoin immediately rose from around $12,300 to an annual high of $12,900.

Sui Chung, the CEO of CF Benchmarks, stated that bullish sentiment might return to the cryptocurrency market. According to Chung, Bitcoin topping $13,000, a 16-month high, shows that this trend is only accelerating. The fact that PayPal has received a conditional BitLicense is probably fueling the bullish sentiment. Mainstream media and ‘family’ retail investors may soon begin to show interest in the asset, as they did at the end of 2017, Chung said.

BTC dominance is increasing

Last week, Bitcoin outperformed altcoins, decentralized finance (DeFi) tokens, and Ethereum.

Josh Olszewicz, a cryptocurrency technical analyst, said that BTC’s dominance is above a key moving average. Technically, this suggests that Bitcoin could continue to outperform altcoins in the short term. 

Bitcoin shows a bullish structure on longer time frames

Throughout October, traders have identified a favorable technical structure for Bitcoin on the longer time frames.

Bitcoin’s weekly chart, in particular, shows a breakout and how it broke past the previous local high reached in mid-August.

Two months ago, BTC hit $12,468 and fell below $10,000. As mentioned above, its price advanced to a new yearly high of $13,217.

In the short term, traders expect the market to cool down after such a strong move. 

Traders expect a bit of a pullback where they will try to find support in the $12,200 to $12,000 range.